Discovery of abnormal financial behavior in a dynamic finance environment with hierarchical self-organizing mapping

Shu Chun Li*, Chiung Fen Huang, Chien Chih Tu, An-Pin Chen

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

That many domestic corporations have suffered from financial crises recently victimizes shareholders of those corporations and. Prior researches about those financial crises are basically one-dimensional basing on static balance sheets or variables of macroeconomics. The present research is directed to utilizing self-organizing mapping (SOM) of a neural network in the dynamic environment for discovering the abnormal financial behaviors of the corporations. SOM, which has been applied by a number of scholars previously in their analyses of detecting the financial crises, is for obtaining the rules for internal clusters of the input data before categorizing them. The present research relies on the macroeconomics and financial indicators, first-order variable processing, normalization, and utilization of the hierarchical SOM to establish the trend of the financial behaviors of the corporations. The present research further shows the combination of macroeconomics indicators and financial indicators is superior to the use of financial indicators only in predicting the abnormal corporation financial behaviors. And the utilization of the hierarchical SOM helps identify the abnormal financial behaviors associated with the corporate operations more effectively.

Original languageEnglish
Title of host publication2nd International Conference on Software Engineering and Data Mining, SEDM 2010
Pages450-455
Number of pages6
StatePublished - 17 Sep 2010
Event2nd International Conference on Software Engineering and Data Mining, SEDM 2010 - Chengdu, China
Duration: 23 Jun 201025 Jun 2010

Publication series

Name2nd International Conference on Software Engineering and Data Mining, SEDM 2010

Conference

Conference2nd International Conference on Software Engineering and Data Mining, SEDM 2010
CountryChina
CityChengdu
Period23/06/1025/06/10

Keywords

  • Abnormal financial behaviors
  • Hierarchical SOM
  • Self-organizing mapping

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    Li, S. C., Huang, C. F., Tu, C. C., & Chen, A-P. (2010). Discovery of abnormal financial behavior in a dynamic finance environment with hierarchical self-organizing mapping. In 2nd International Conference on Software Engineering and Data Mining, SEDM 2010 (pp. 450-455). [5542880] (2nd International Conference on Software Engineering and Data Mining, SEDM 2010).